News

December 2017 Sales and Business Development Update

Revenues from customers over the quarter to 31 December 2017 were consistent with the previous quarter ($800,000 compared to $799,000) and profit margins remained similar. Manufacturing and operating costs rose from $729,000 to $934,000 as a result of timing differences and a significant down payment on milk powder production, the revenues from which are expected to be booked in the March 2018 quarter. Administration and corporate costs rose (from $159,000 to $257,000) as the company developed the infrastructure to support business growth.

A successful capital raising brought $2.719 million into the company, net of costs, from new shares issued. The cash at bank accordingly increased from $108,000 to $2.438 million ensuring that the company is well funded for its working capital requirements. Since the end of the quarter the company has raised over $1 million in additional capital following an Extraordinary General Meeting.

As announced during the quarter, wholly owned subsidiary Cobbitty Country has entered into an agreement to purchase 51% of Golden Koala Group Pty Ltd (“GK”), subject to shareholder approval at a general meeting to be held in February. GK is an Australian milk powder brand, its primary product being “Golden Koala Infant Formula”. This transaction represents a key development in JAT’s strategy to transition from low margin trading of third party products to selling JAT owned products at substantially higher margins.

GK has an established track record of selling milk products in China and previous CFDA approval. GK has secured an agreement with Nutritional Choice Australia Pty Ltd (“NCA”) to manufacture premium infant milk formula for export to China. NCA is one of only 15 Australian manufacturers currently accredited by the CNCA (Certification and Accreditation Administration of the People’s Republic of China) to export infant formula into China, and from 1st January 2018, each manufacturer is licenced for a maximum of three formulations. This means GK’s formulation will be one of only 45 (currently) which can be sold ‘offline’ – in Chinese shops and supermarkets.

With this licensed manufacturing capacity now in place, GK will next apply to renew its China FDA approval, with JAT’s assistance. Given JAT’s extensive working relationship with Chinese regulators, the Board is confident of GK achieving approval in 2018.

AGM Investor Update

The Chairman is please to make available a copy of the presentation made to shareholders made at the Annual General Meeting on Tuesday 28th November, 2017.

Screen Shot 2017-11-29 at 6.00.53 pm

Please note that the information contained in this presentation is for information purposes only and was prepared for use in conjunction with a verbal presentation and should be read in that context.

June Update

2017 was a transformative year for Jatenergy, with total sales for the year ending 30 June 2017 of $10 million. This success has largely been driven by;

  • JAT’s extensive Chinese business network.
  • Precise attention to the regulatory environment.
  • A portfolio approach to products and market segments.

The board expects this approach will continue to assist JAT to exploit the massive potential of the Chinese market and avoid the pitfalls experienced by some other Australian exporters over the last year. The board plans to continue to develop the soft commodity trading business in the coming year with a gradual change in focus from expansion to profitability as the business consolidates.

 

Record Sales in March Quarter

The Board is please to announce another record quarter with sales for the quarter ending 31 March 2017 exceeding $3.8 million. This result reflects continued development of Jat’s supply of quality Australian products and a strong working relationship with Daigou groups.

JAT’s Fast Moving Consumer Goods strategy takes advantage of several powerful, long term trends affecting trade between Australia and China.

CHINA / AUSTRALIA TRADE MEGATRENDS

  1. A massive and growing Chinese middle class. Estimated to be between 109 and 145 million people and growing, this group is following a pattern regarded as standard for developing economies: as disposable income increases, private consumption increases, not only in absolute terms, but also proportionally.
  2. An ageing population. China’s demography is undergoing significant change, becoming one of the world’s fastest ageing nations, creating massive demand for healthcare and for pharmaceutical and personal care products and services.
  3. A cultural shift. Chinese dietary and consumer goods consumption patterns are becoming more international and more westernized.
  4. Australian products: healthy and safe. Australia is perceived as a natural source of safe and healthy products benefiting from strict and consumer protection laws.
  5. ChAFTA entered into force in December 2015 with some tarrifs falling immediately and many more scheduled between then and January 2029. This will provide a continuing source of opportunities over coming decades.

Quarterly sales top $2.5 million

The board is delighted to announce another significant increase in revenue for the December quarter over those of September, June and March. Sales for the quarter were just above $2.5 million due to increased activity in our DAIGOU sector. We expect this strength to continue, assisted by more significant Chinese ‘consumer days’ to come, including Lunar New Year.

We note that a number of Australian exporters offer single products, such as milk powder, or target single markets, such as personnel care products. Clearly this narrow approach exposes those companies to fragility in earnings.

JAT has adopted a broader portfolio approach, exporting a wide range of products in different markets. This provides a measure of protection from fluctuations in consumer likes and dislikes. We seek exclusive markets and products that we believe offer long term potential.

Gross sales of over $2 million in a single day … China’s “Singles Day”

Jatenergy is very proud to have had the opportunity to participate in Single’s Day sales activities with our local suppliers, our Chinese partners and logistics teams. Jatenergy had gross sales of over $2 million of Australian products including dairy products and health supplements.

“It is great news for our suppliers and distributors”, says Wilton Yao director of Jatenergy. “We thank our local suppliers for their products and participation in the great event.”

Mr Wilton Yao

Our successful participation in “Singles Day” gives confidence for sales in the upcoming Christmas and Chinese New Year period.

Jatenergy has been trading into China for the past 18 months and is continuing to increase its sales quarter by quarter. Wilton Yao sees more business for Australian companies as China welcomes its high- quality products and regards Australian production as safe and clean. “It is important that we market product that is wanted by the Chinese market and we bring product into China through the proper and legal channels. It is the reputation of our Company and our suppliers that is important, with it you gain trust and get more opportunity to sell product”.

Singles day is regarded as the biggest one day sale and within the first five minutes of the sale Alibaba posted over US$1 billion dollars in sales, with a final figure expected to be approximately US$17.6 billion for Alibaba alone. Mr Yao said “It is expected that Alibaba will break another Singles Day sales record this year. Chinese consumers are spending big and continue to regardless.” The Singles Day was invented by students in China as a counter to Valentine’s day. The joke day is now regarded as the target day for Australian manufactures selling into China. Pioneered by Alibaba in 2009 and since replicated by rivals including JD.com, Singles Day has become somewhat of a barometer of Chinese consumer sentiment.

Quarterly sales of just under $2 million

September 2016 quarter FMCG revenue — $1,780,000

Mr Tony Crimmins
Mr Tony Crimmins

“Investors will be pleased to note that sales invoiced for the quarter were just under $2 million due to increased activity in our DAIGOU(*) sector,” Executive Chairman Mr Tony Crimmins said. “JAT continues to seek products and brands that pass Chinese CIQ standards which is paramount in ensuring legal exportation of product to the satisfaction of Chinese regulations.”

The company remains committed to assist all Australia food, cosmetic and nutraceutical producers fair access to the Chinese market. JAT will continue to focus on products that sell well in Australia and adhere to Australian Product Standards.

The company has a number of high line distributors in China seeking Australian product which demand good and safe product for sale to the Chinese consumer.

(*) Daigou (Chinese: 代购 dàigòu also 海外代购 hǎiwài dàigòu) is a channel of commerce in which a Chinese personoverseas purchases luxury goods for a customer in mainland China. The phrase means `buying on behalf of`.